A BREAKDOWN in wage talks between the labor union representing German metalworkers and an employers federation poses a serious threat to economic recovery.
Leaders of the 3.6-million member IG Metall union have announced they will resume staging warning strikes Feb. 16. If there is no contract settlement by Feb. 21, union leaders say they will hold a vote on whether to hold an all-out strike.
The latest round of talks Feb. 11 failed to make any progress toward a settlement. Representatives of the employers federation, Gesamtmetall, criticized union negotiators for being ``dogmatic and unrealistic.'' No new talks are scheduled.
The main issue now appears to be union demands for job guarantees in return for moderate pay increases. Employers are seeking to freeze wages and reduce other benefits, saying drastic cost-saving measures are needed for German industry to remain globally competitive. Leaders of both of Germany's major political parties - the Christian Democrats and Social Democrats - are trying to encourage a settlement.
Many financial analysts say IG Metall's strike rhetoric is a negotiating ploy. But if union members walk off the job, it could stall the recovery from Germany's worst recession since World War II. This year, some estimates say the German economy will be lucky to grow by 1 percent, barring any labor unrest.